Electricity rates might be raised in April, a recent announcement from the Ministry of Economic Affairs said.
This has triggered a series of debates.
Since a 3 percent hike was introduced in 2018, electricity rates have remained the same for over four years.
In terms of electricity rates, globally, Taiwan ranks the fourth-lowest when it comes to household electricity prices and sixth-lowest for industrial electricity prices, statistics released by the International Energy Agency in 2020 showed.
Currently, average household electricity rates are NT$2.56 per kilowatt-hour (kWh), much lower than that of South Korea (NT$3.07/kWh) and Japan (NT$7.54/kWh). In Denmark, the price is NT$9/kWh.
The cost of fuel has increased drastically over the past two years.
Many countries, such as Japan, South Korea, the US and Germany, have adjusted their electricity rates accordingly since 2021.
In Taiwan, the government’s policy is to absorb as much of the cost as possible.
This is so that the public’s basic needs are met and so that the possibility of inflation rising due to electricity price hikes could be avoided.
However, these days, fuel prices show no signs of decreasing and it looks like the costs of energy will continue to increase in the near future.
To deal with such a situation in a responsible way, electricity rates must be raised in Taiwan.
It is only by doing so that costs could be covered and that Taiwan Power Co (Taipower) could function in a sustainable way.
Taipower has been experiencing deficits for two years. Despite an electricity subsidy of NT$50 billion (US$1.58 billion) from the government, the company’s losses still reached NT$198.5 billion last year.
As such, electricity rates should be modified in accordance with the costs.
Reasonable rates would also help the public understand what it takes to use electricity, which might lead to lower energy usage and a reduction in carbon emissions.
However, the public might have a hard time accepting this increase in electricity prices.
The government could take the initiative to impose an “energy tax,” requiring all users of electricity to pay a certain amount.
This tax should be based on the principle of “those who pollute the environment more should pay more.”
It would be imposed on the sources of power generation systems and the tax would be based on the amount of carbon emissions.
To be specific, it is the private companies that collaborate with Taipower that should be taxed.
This would help the public understand more about electricity rates and debunk the myth that renewable energy is more expensive.
The tax energy policy might also encourage the more efficient usage of electricity, reducing costs.
When raising electricity prices, the government should take certain groups of people, such as the disadvantaged and small business owners, into consideration and do their best to mitigate the impact on them.
For larger companies and those who consume more electricity, the government should make it clear that they must pay more.
Those who use more electricity should not be subsidized.
The government should not go against the grain of social justice by robbing the poor and assisting the rich.
Dino Wei is an information engineer in Yilan County.
Translated by Emma Liu
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